Govt. to go ahead with performance audit of ICTT at Vallarpadam

The Shipping Ministry will go ahead with a performance audit at the International Container Transhipment Terminal at Vallarpadam (ICTT) here.

performance audit of Vallarpadam container terminal

The Ministry has entrusted the audit wing of the Comptroller and Auditor General (CAG), Chennai, with the job and is awaiting concurrence from the terminal operator, DP World.

The operator’s consensus is mandatory in such cases.

The move assumes significance at a time when the underperformance of the Vallarpadam terminal, which was commissioned in 2011, has become a concern for the stakeholders, including the Ministry, Kochi Port and shippers.

DP World had not responded so far. Since the Vallarpadam project is in the public private partnership (PPP) mode, the authorities need permission from the terminal operator to carry out the job, said a Kochi Port source.

Besides, there is an ongoing dispute on the role of the CAG in carrying out performance audit in PPP projects, the source said citing a precedent in New Delhi.

Of the total INR 2,600-crore investment for the ICTT project, the government has invested INR 1,400 crore and the terminal operator INR 1,200 crore.

The directive to carry out the performance audit was given by the PMO based on a submission in the Rajya Sabha by the former member P Rajeeve.

However, the revision of the Cabotage Law, which will expire on December this year after a three-year time frame, will be on the agenda of the performance audit. It appears that the continuation of the cabotage relaxation will be based on the outcome of the performance audit, the sources said.

The Ministry has been frequently asking the port for the reasons for the underperformance of the terminal, which has registered a 6% mgrowth in cargo volumes in March 31, touching 3.61 lakh Twenty Foot Equivalent Unit (TEU) out of the one million TEU capacities.

DP World, according to the sources, had cited several reasons for the under-performance, which included the inordinate delay in getting relaxation in Cabotage Law, non-completion of the national highway connectivity and failure to achieve 14.5 meter draft to berth mother vessels.